French push for EU tech tax falters as Italy vows to go it alone

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French Finance Minister Bruno Le Maire’s efforts to rally his European Union colleagues around a new tax on tech giants fell short, as countries skeptical of the plan doubled down on their opposition, and others, including Italy, said they’ll push ahead with their own plans.

Ministers from Denmark, Ireland and Sweden said they couldn’t support the tax in its current form, casting doubt on the proposal’s future, since unanimity is required to pass taxes in the EU. The plan on the table would impose a 3 percent levy on the European sales of the likes of Inc. and Facebook Inc.

Le Maire made a vigorous defense of the proposal, and offered a concession to its opponents who want the EU to wait for work on a global tax to bear fruit rather than going it alone. As a concession to those wary of rushing ahead, he said France would support pushing back the start date of the tax to 2021. And he put an optimistic spin on the debate among finance ministers in Brussels.

“The debate shows that we’re moving in the right direction,” Le Maire said during the discussion on Tuesday. “It just remains for me to offer Paschal a beer in a Dublin pub, and then I think we’ll be able to move toward a decision,” he said, referring to his Irish counterpart, Paschal Donohoe.

A number of countries are already imposing taxes of their own, increasing the risk of fragmentation in the single market. Finance Minister Giovanni Tria said an Italian tax will kick in next year if there’s no broader agreement by then. Spain and the U.K. have already announced their own levies.

The dispute highlights deep divisions within the bloc, as EU governments struggle to strike a balance between luring lucrative businesses and addressing popular discontent with companies not paying their fair share. Traditional tax systems have so far failed to capture revenue from companies with global reach but limited physical presence, fueling anger from voters disgruntled after years of austerity and meager wage growth.

— With assistance from Nikos Chrysoloras and Viktoria Dendrinou

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